Kylin Management is a small hedge fund that is flying under the radar, so to speak. The fund, which was launched and is managed by Ted Kang, a former employee of Julian Robertson’s Tiger Management, has been around since 2005 and currently has an equity portfolio worth $480 million, which is too small to capture the attention of the media, especially since it is a passive fund. Outlets like CNBC and The Wall Street Journal prefer to focus on big names like Carl Icahn, Warren Buffett, and George Soros and that’s a shame, because Kylin Management is definitely a fund worth following.
Large funds such as Berkshire Hathaway, Pershing Square and the like, have a lot of money to invest, which is why they have to adopt a more careful approach to picking stocks, which is why they often invest in big, widely-covered companies, in order to minimize their risks. In addition, many of these funds are pretty conservative and rarely make any significant changes to their portfolios. These factors lead to them earning smaller returns. On the other hand, smaller investors like Kylin can assume more risk, which in combination with thorough analysis, can lead to pretty good returns. According to our calculations, Kylin’s stock picks generated a return of nearly 27% in the first-quarter, versus the S&P 500’s gain of about 5.5%.
And Kylin is not the only fund that is scoring big returns but failing to get much attention. Another example is Alex Denner’s Sarissa Capital Management, whose stock picks earned a 200% return in the 1-year period ended March 31 (see some of its stock picks here). Following such funds and imitating some of their stock picks can be an easy way for a retail investor to beat the market. This is where our research comes in handy. We follow over 700 funds and analyze their quarterly 13F portfolios to identify their winning picks, which we share in our newsletters. Our flagship strategy has returned 44.2% since February 2016, beating the broader market by some 15 percentage points. Our previous batch of stock picks beat the market by 5 percentage points over the past three months, and we have just shared our newest batch with our subscribers, so you can still jump in. In addition, we offer a 14-day money-back guarantee for subscribers to our premium newsletters and you can also get $90 off for a limited time by accessing this link.
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Having said that, let’s discuss some of Kylin Management’s stock picks from its latest 13F filing. The investor mainly invests in China-based companies and despite some changes that the fund made to its top positions during the first-quarter, its top-3 remained the same: New Oriental Education & Tech Grp (ADR) (NYSE:EDU), Alibaba Group Holding Ltd (NYSE:BABA), and Vipshop Holdings Ltd – ADR (NYSE:VIPS). The fund also initiated three new positions between January and March, and we’ll take a look at the two largest of those, in Align Technology, Inc. (NASDAQ:ALGN) and Melco Resorts & Entertainment Ltd (ADR) (NASDAQ:MLCO).
